Please Note: My Blog appears only here on blogger. There are copycat blogs that use my content and other sites that use the same name. I am not affiliated with them. Please also note that I am not on Facebook and any links to this site from Facebook or other sites are not affiliated with me.

Sunday, December 31, 2017

My Dad used to repeat the old saying, "Those who can't do, teach" which was odd, as his Mother was a teacher. But there is a nugget of truth to the saying - people who spend their lives in school or academia, often are out-of-touch with reality. Moreover, while they are quite adept at teaching subjects, they might not be as adept at practicing them. Of course, this is not always the case - sometimes great jurists are also classroom professors in law school. My experience, however, was that the law school professors with the most "real world" experience were the worst teachers, and vice-versa. Teaching is an art - and a separate skill from the subject being taught, in many instances.

I could say the same for my Engineering professors - the best "teachers" were the Teaching Assistants (TA's) who recently learned the subject themselves. The brainiest professors - the ones who published numerous research articles and were revered in the field - were often the worst professors. My electomagnetics professor, for example, was a bloody genius - but couldn't get his point across to the students. And that is the difference between teaching and doing.

Even the best of ideas and inventions go nowhere, if you can't communicate them to others.

"If you can't explain it simply, you don't understand it well enough." - Albert Einstein

I don't know if the above quote is real or not, but it reminds me of a similar quote, something along the lines of "If you can't explain a complicated concept to a simple person, then you don't really understand it yourself".

This is not to say that you should ignore your teachers or run them down as a bunch of has-beens or wanna-bes. They have a lot of knowledge to impart to you. But you realize, 10, 20, 30 years down the road that your career will likely eclipse theirs, if you have any sort of gumption at all.

There is another quote - or a series of them (again, perhaps specious) along the same lines:

"Poor is the pupil who does not surpass his master." - Leonardo da Vinci

"The student that does not exceed the master, fails his master" - Sun Tsu

"The disciple is not above his master: but every one that is perfect shall be as his master." - Luke 6:40

Only the last is an actual citation that I can find. The point is, a good teacher wants you to go out into the world and be successful - usually more successful than he is. No teacher wants you to remain a subservient student forever. You must learn to think and act for yourself. Teachers are not Gods - they are fallible. And often they are imperfect and thus teach instead of do.

What got me thinking about this was a video I linked to in an earlier posting. The video is of a psychologist, "Dr." Jordan Peterson (if you are bleeding, don't go to see him - go to a real doctor). He has a number of videos on YouTube that are popular with a lot of people who are libertarian or conservative or just plain fed up with political correctness. He makes a lot of good points, but he sort of takes a good thing too far.

I lost him when he started doing lectures on economic theory. Wait a minute - a psychologist telling us all about economic theory? Someone is playing outside their sandbox! It also got me thinking that every single psychologist I've ever met is a little crazy. And maybe you have to be, in order to be a psychologist. I don't give what they have to say a lot of weight as a result.

Apparently, he is also an Egyptologist - claiming that the Egyptians put their Pharaohs in pyramids because of this "hierarchy of authority" (which he says, always making a triangle with his hands). The guy is Ben Bernanke and Indiana Jones, all rolled into one. Like much of the stuff he says, he provides no authority for such statements - they just fit his world-view, ergo, they must be true. That particular video made me sad, as I thought there might be some "there" there with this guy, but the more I watch, well, the less impressed I am.

And a guy is a university professor who has spent his entire life in academia. I am not sure he can tell me about economics, working, and so forth. Experience is the best teacher, and I am sure he could tell me a lot about what it is like to work at a university and the politics of those institutions. And he has a lot of other insights as well. But most of us have more life experience that he has had, doing "research" on psychology. This guy makes me wonder if the Scientologists aren't right.

But it seems to me that some are ascribing guru statusto him, because he has done all this "research" about psychology and religion at university, so he is the one qualified to tell us about social justice warriors, or transgender this and that - or to set down "12 rules for life." Hmmmm... that last seems a little narcissistic. He doesn't seem to truck any disagreement with his philosophies - there is his way, or the highway. This is not a sign of open-mindedness. But then again, it is a sign of a religious person.

And they might be right. But that is not the point of this posting. The point is, it is important to listen to all points of view, and not to think that one person has all the answers. Because all of us are wrong some of the time, and to paraphrase another quote, "no great idea exists in the mind of a single man" or something along those lines. The give-and-take of the exchange of ideas is what makes us, as humans, function at the highest efficiency. When we discard opposing views out of hand, we usually end up in trouble.

There is a nugget of truth in what everyone has to say. Yes, even this Jordan fellow - and even President Trump on occasion (rare occasion, but when someone is right, just opposing them on general principal is idiotic, but tell that to the Washington Post.)

Mr. (not "Dr." - and remember what I said about people who put "esquire" after their names!) Jordan has some interesting ideas, but is hardly the end-all and know-all. He's just a college professor, and I find it somewhat ironic that the far-right, who routinely discards the notions of academics in their "ivory towers" now embraces an academic who has spent his whole life in such a tower.

But then again, the far-right seems more than capable of holding two opposing ideas in their heads at the same time... quite easily, in fact. There is a lot of empty space in there.

When you or I make a mistake at work, the worst that can happen is we get fired. When the Police make a mistake at work, people can get killed - sometimes Police officers, sometimes innocent bystanders. It is a tough job, considering the pay involved.

Mark and I first lived together in Hunting Towers in a one-bedroom apartment. I moved in with him after we've been dating for only a few weeks, which in retrospect seems kind of premature. Both of us were paying at least $700 a month for apartments, and it seemed like a much better solution economically. And yes most relationships have a foundation in economics as well is what we call "Love" or the emotional factor. I'm very fortunate to have both.

Mark had two cats and I had one cat, so there was two of us with three cats living in there like a couple of lesbians. But we were happy and content and we stayed there until the end of the lease and which point we looked for someplace else to live and couldn't find anything better. So we ended up renting a two-bedroom apartment with the balcony overlooking the Potomac for the whopping sum of $900 a month - including utilities and two underground parking spaces. In retrospect it was a pretty nice place to live. One of the buildings has been torn down to make room for the new Woodrow Wilson Bridge (above). Two buildings still stand, and it still remains a pretty inexpensive place to live in Old Town, Alexandria.

But back then it was a little more sketchy. There were a lot of little old ladies living there by themselves, often falling down and breaking their hips and dying slowly alone in their apartments which was a real tragedy. And there were a lot of young people and other sorts of sketchy individuals, particularly the further East you got in the buildings. There was a hierarchy of class in the buildings. The West building was the cream of the crop, being the furthest from the Wilson bridge. The Center building, was OK, but the East building was, well, downscale.The first apartment we had was in the center building, and we "moved on up" to the West side.

While we were in the first, one-bedroom apartment, across the hall from us was young couple who fought constantly. We never saw them, other than perhaps glimpses as we passed in the hallway. It's an ironic thing about living in a high-rise apartment - you actually have more privacy than you do living in the suburbs or in the country. As I noted another posting, when we lived in rural Upstate New York, our neighbors would ask us who was visiting yesterday, as they saw somebody else's car in our driveway and even wrote down the license number. If you want have privacy, the country is not a place to do it.

Anyway, one night the police pounded on our door while we were sound asleep. Mark got up and went to the door and the police said they had to call about domestic violence. We were very puzzled by this, as we were sound asleep and snoring - and we don't really snore that loudly. The policeman insisted that I get out of bed and come to the door and wanted to know if I had been beaten by Mark. It was pretty hilarious, as I was wearing his bathrobe which is about five sizes too small for me. I'm sure the policeman probably shook their heads and said "couple of fags having some sort of screaming argument." And then they left.

It wasn't until they left that we realized they probably were looking for the couple across the hall who were always having a knock-down drag-out and knocking over furniture and hollering at the top of their lungs. We were so used to it we didn't even hear it. Another neighbor must have heard the argument and called the police and didn't realize they gave the police the wrong apartment number. So they came knocking on our door, instead of the door across the hall where the real dispute was.

We were fortunate that there were no repercussions from this error. However recently a young man was shot and killed as a result of the police making a mistake as to weather there was a hostage situation going on in the house. As you no doubt have read in the news, young gamers online get mad at each other and then "swat" each other by calling the police and telling them there is a hostage situation going on at the opponent gamer's house. The police show up, sirens blaring, with their SWAT gear and flak jackets and burst through the door and put everybody in handcuffs.

And this is why sitting around your mother's basement playing video games is a really bad, bad thing. People like to say video games are harmless, but they can be very addictive, and many people spend hours and hours every day playing video games. And no, I don't spend hours and hours every day watching television. Compulsive-Addictive behavior is never healthy, especially with that leads to people being killed.

As it turns out, one of the gamers, gave a false address to a completely innocent party in Kansas. The police got the phone call and rushed off to the house, thinking there was a hostage situation, without bothering to do something as simple as calling the phone number listed for that house and perhaps asking them what was going on or at least telling them they were coming. Or they could have called the spoofed caller-ID number and realized it was a prank. (By the way, remind me again why we allow a phone system to exist where caller-ID is so easy to spoof). They jumped to conclusions and ended up killing someone who is completely innocent and are involved in the entire process.

The police claimed they were just doing their job and at the real villain here was the gamer who gave out the wrong address. While I don't disagree with the latter part of that statement - the gamer should be arrested and charged - the police have a greater obligation to check things out before they jump to conclusions. And given that this "swatting" has become a "thing" - the police should have procedures in place to make sure that they are not being used as part of some online gamer's revenge. Like I said it could be something as simple as a phone call.

The sad part about this story is that the gamer apparently has been arrested, but what can they charge him with? The most they can charge him with, as far as I know, is filing a false police report which in many States is merely a misdemeanor. Even the most serious penalty for this might amount to a few months or maybe a year of jail time. And somebody has died as a result.

So who is to blame for this? Is it the police? Gamers? The particular gamer in question? Or is it been the gradual militarization of our police which has resulted as from the increase number of guns and assault-style rifles which have flooded the streets? Or maybe our casual level of violence which we've grown to accept? It is troubling that today, the Police accept that a "hostage situation" is a normal thing and have a response team in place - and no one bothers to ask why someone in a comfy suburb in Kansas would be taking hostages at all. We just assume it is true, because similar gruesome things have happened.

The FBI says that crime rates are at an all-time low, and that in New York, the crime rate is as low as has been in since the 1950s. But I wonder if that's because we've come become accustomed to a certain level of violence and mayhem in our society.

In another item in the news, former Alaska Governor Sarah Palin's son, "Track" Palin was arrested for breaking into his parents' house and attempting, apparently, to steal a pickup truck. He beat up his father, Todd, and was put in jail. Unfortunately, this is not the first time that Track has run into trouble with the law. Last year, he assaulted his girlfriend and was charged with domestic violence. His mother excuses the entire thing claiming that he was having PTSD.

In an interesting Republican twist, Ms. Palin claims that the PTSD is not a result of serving in Iraq, but as result of the disrespect he has received or potentially will receive from American citizens upon his return from the war. In other words, she is invoking the "Spitting on Veterans" defense which was raised many years after the Vietnam War ended.

If you talk to any Vietnam veteran today, they will all tell you, without exception, that they were spit upon when they returned from Vietnam. When you ask more pointed questions, they may admit that they were not personally spit upon but they heard about somebody else being spit upon. Apparently it was a lot of spitting going on. The reality is that, yes, there were some hippies who were stupid enough to hold up signs and blame the troops for their actions in Vietnam instead of blaming the powers-that-be that sent them. And such actions are abhorrent and should be condemned roundly.

But they should not be turned into an urban legend, where every veteran was systematically spit upon upon their return. Because that just didn't happen. And why do I know this? Because I was alive when veterans returned from that war, and we would have heard about it if it did. Imagine an assembly line of spitters waiting at the airport for the thousands and thousands of GI's returning from Vietnam. It's just a ridiculous proposition - the logistics of this spit-fest would be staggering. And hippies are not very good at logistics - look at Woodstock.

I am not saying it never happened, only that over time, the "Mandela effect" has kicked in, and suddenly, hundreds of thousands of veterans "remember" being spit upon - far more that could have possibly be spat at.

But not only that, the narrative is just wrong. Many of the war protesters of that era realized that the veterans were not to blame for the war, but the generals and politicians who sent them were. And in fact, many veterans, such as John Kerry, were active in anti-war protests, because they knew firsthand the futility of the Vietnam War. Did John Kerry have to spit on himself? Oh, wait, I just started another urban legend.

And yes, we probably could have "won" the Vietnam War if we carpet-bombed Hanoi and committed other atrocities. But in the long run we would have turned out to be the bad guys and it would have backfired on us in a big way. Ironically today, Vietnam has cozied up to the United States as they need someone on their side because they have a very powerful neighbor to the North. And from what I understand, people returning to Vietnam are often treated very warmly even though we bombed the hell out of them and killed a number of their civilian population. The depth of human forgiveness is unfathomable.

But getting back to Track Palin, apparently his real issue is his love for alcohol and opiates. Ms. Palin, while calling the police said he was "on some sort of medication" which made me chuckle, because of course Republicans don't do drugs, they just do medication. As long as it's prescribed by a doctor it's not a drug - right?

I don't know why the two items might be related - or I guess the three items - other than that when the police showed up at Track's parent's residence, they didn't come in with guns blazing. They took away Track and put him in jail where apparently he still sitting awaiting trial.

You know, I wonder if this isn't all the consequence of giving your kid a goofy name like "Track." Perhaps it was a family name. Or they were naming their kids after snow-machine parts. I dunno. Good thing McCain lost, I guess. We don't need that sort of trailer trash in the White House. Oh, wait...

Why couldn't the police use a similar amount of restraint as they did with Track as they did during the incident in Kansas? In Track's previous incident with the law, he was apparently waving an AR-15 about, and no one gunned him down then.

I've learned a valuable lesson from this - when the police come to the door, you shouldn't go rushing out there to greet them. In fact, I'm not exactly sure how to handle such a situation without getting shot, other than to wait for the smoke grenades to come crashing through the window.

An article today in Marketwatch posits that one thing that might kill off the bull market is a building credit bubble. They are not talking about the staggering levels of debt that some Americans are taking on - the highest since the recession - but instead the levels of debt that companies are taking on.

As I noted in another posting, companies can raise capital in a number of ways. They can sell stock, or equity in the company, or they can sell bonds or borrow money from a bank. Debt is really not much different from equity, other than debt-holders don't get a say in how the company is run, except perhaps in bankruptcy court, where they are often in the driver's seat. On the other hand, a lot of these new "tech" companies are selling stock without voting rights - or the majority of stock is held by three or four investors - so your voting rights are no-existent or illusory.

And as I noted in another posting, companies can pay shareholders in a number of ways. The most obvious way is to pay dividends. But dividends might be taxed at ordinary income rates, and thus are not a good value for the shareholder - particularly the larger shareholders. Increase in stock values, however, are not taxed until the shares are sold, and even then at long-term capital gains rates which are far lower than ordinary income rates.

One way to do this is to buy back your own stock, which means fewer shares are in circulation. If, for example, ACME company is "worth" a million dollars and has a million shares outstanding, then arguably the share price should be a dollar a share. If they buy back a half-million shares, the share price should jump up to two dollars a share. This is not a taxable event, until the shares are sold, and even then, at capital gains rates.

As the article notes, Apple is buying back seven billion dollars worth of shares, after floating five billion in bond issues. Leave it to the lizard people at Apple, living in their flying saucer - selling out before they return to the home planet. I just don't trust them! But seriously, this illustrates one pitfall of share buybacks based on debt. If the company takes on more debt to buy back shares, then the shares shouldn't be worth more.

For example, going back to our mythical ACME company, if the the company is initially "worth" a million dollars, and they borrow $500,000 to buy back half their shares, the company is now only worth a half-million dollars, as they have this new debt on their books. They have 500,000 shares and a worth of $500,000 - so the share price should be stuck at a buck-a-share.

But since the company is a "hot stock" we've decreased the number of shares in circulation, and thus the share price might rise just due to the laws of supply and demand. People want to buy the stock, and now there is less of it to buy.

Since the CEO, CFO, Board Members, and all senior management of the company is paid in stock options and increase in share price can mean a windfall of millions, if not tens of millions of dollars for them. This is what happens when we incentivize managers to increase share price - they will use whatever means necessary to increase share price in the short term, without thinking of how this will affect the long-term prospects of the company. So managers might decide to do odious things - like intentionally slowing down older cell phones to get people to buy new ones, or perhaps cheating on diesel emissions testing to sell more cars. Or, whatever.

As I noted in the posting cited above, some folks like to use the term "Enterprise Value" to determine what the worth of a company is. This is a far better metric than "Market Cap" that the financial channels use. It can be a fairly complicated calculation, but boiled down, it takes the market cap and adds the corporate debt to come up with a better valuation of the company - what it would cost to "buy" the company in a takeover. Debt and equity are valued equally.

Let's go back to ACME company, which bought back half its stock. Since they have hot products and are mentioned prominently in the financial press, people still want the stock - but there is only half as much as there once was. So the share price goes up to $2 a share. Now, if you just used "Market Cap" to valuate ACME - or the share price - you might think the company has stayed the same in value, as it's "Market Cap" is still a million dollars (500,000 shares times $2 a share). But that fails to take into account the half-million in debt they have taken on. If the share price goes up, arguably the "Enterprise Value" is a million-and-a-half, which makes no sense at all - the company takes on debt and is now worth more. It is more complicated that that, of course, but you get the idea.

But this illustrates how a company can buy back shares to thwart a takeover. If the share prices rise and the Enterprise Value rises as a result, the company will be more expensive to "buy" in a takeover and thus the potential suitor has to pony up more dough. But of course, Apple is not a target of a takeover, so that is not in play here.

It is possible for managers to hollow out a company with debt, and we have seen this happen over the last two decades. When Mark worked at Sheets 'N Things, the company loaded itself up with debt. The stores were profitable, by and large, but not profitable enough to service the massive debt load. Today, we are seeing the same thing with a whole new slew of companies, such as Toys R Us, which is going through reorganization not due to Amazon as reported in the press, but because the company is saddled with debt.

Will this level of corporate debt cause a recession in 2018? It is hard to tell. But I think in general, recessions are caused not by one single thing, but by a panoply of things. You may recall in the summer and fall of 2008 when things started to unwind the last time around. George W. Bush signed the bailout bill to prevent the economy from going into free-fall and keep Wall Street firms from going under (most of them, anyway). Gas soared to $5 a gallon in many places. The car companies faced bankruptcy. Oh, and the housing bubble burst.

If you ask people about the recession of 2008, many of them today will say it never happened. The few who acknowledge it did, will say it was caused by Bill Clinton and the "Community Reinvestment Act". The few who are not listening to infowars, will say it was caused by an overheated housing market. And that last explanation is true, but not the whole case. General Motors didn't go bankrupt by trying to buy-and-flip houses.

So this time around, it may not be any one "thing" but a panoply of things. Corporate debt, personal debt, bankruptcies of brick-and-mortar stores, trade wars, inflation, higher interest rates, higher wages and a tighter job market, exuberance over things like Bitcoin, and so forth. And yes, maybe even over-inflated real estate prices in some markets. Eventually, people pull back, often not out of choice, but necessity.

Cristalino is an inexpensive Brut Cava (Spanish Sparkling Wine) that sells for $6.79 a bottle at BJ's wholesale.

Note: This is an updated Posting for New Year's Eve. If you are looking for a good inexpensive sparkling wine, Jaume Serra Crisalino is a good bet. And don't just drink it for New Year's. This is a good everyday wine! Updated again for 2017!

Americans have an odd relationship with sparkling wines or Champagne. We tend to view Champagne as something for very special occasions - launching ships, getting married, anniversaries, or New Year's Eve.

And this is a shame, as Champagne is just wine - and it should be drank at all occasions, even with a TeeVee dinner. There is no need for special occasions to drink good wine - sparkling or not.

If you read Hemingway's stories about cafe society in Paris, you'll know that he and his friends would sit around all day and drink "wine" at Le Dôme or wherever, and often this "wine" was in fact, Champagne. No one felt that it was something to be saved for New Year's eve!

Americans, in contrast, tend to view Champagne as something staggeringly expensive and special, to be used only on occasions when you want to put on the dog. In the Rap world, up and coming Rap stars drink Louis Roerder's "Cristal" for $600 a bottle at the strip club. I drink "Cristalino" for $6.99 a bottle. As it clearly says on the label, "Not to be confused with or associated with, Louis Roerder's CRISTAL." Thanks, got that. The price tag gave it away.

By the way, as part of the NAFTA agreement, we are supposed to respect the rights of the Champagne makers in the Champagne region of France, by only calling sparkling wine from that region of France, "Champagne". Of course, as Americans, we are not bound by what a bunch of Frenchies say - although it is in bad taste to call your Korbel, "California Champagne" - as you are fooling no one. If you see an American sparkling wine that is labeled "Champagne" you can bet is probably it is not very good.

There are a lot of sparkling wines made all over the world that are very worthy, even if they are not from the Champagne region of France. Spain has its Cava, Italy its Prosecco. Many Americans wineries just call it Methode Champagnois, which gets the idea across.

And many of these sparkling wines are quite good and relatively inexpensive - on the order of $8 to $20 a bottle - certainly not anything that prices it only for "special occasions". And yes, some of these are even French sparkling wines, and yes even some French Champagne can be rather inexpensive.

And with wine, like anything else, there is no "right" or "wrong" taste in the beverage, although enthusiasts tend to favor certain brands and types. I have a friend who likes Korbel - she likes the taste of it. She can easily afford Dom Perignon, but prefers Korbel. That is the great thing about wine - there is no right or wrong answer, only what you like. And if what you like is cheap, well, so much the better.

Although for most of us, our pocketbook dictates where our selection lies. There are a number of great Cavas and Proseccos out there for not a lot of money..

The Cristalino Cava caught my eye at the store because of the prominent disclaimer on the label - which any Trademark Attorney would understand. It is akin to putting a Rolls Royce grill on a Toyota, and then painting on the side of the car, "This car is not a Rolls Royce, nor is it endorsed by Rolls Royce". Sort of tacky. But it made me chuckle.

But that's Trademark Law for you. I kind of like the fact that they did not back down on the name. And sorry, no, Mr. Roerder, there is no "likelihood of confusion" in the market place between Juame Serra Cristalino and your overpriced Pimp juice (which most wine enthusiasts say really isn't all that great, but the Rap stars keep driving the price up, wanting to buy "the most expensive Champagne" and Dom just won't do).

But if they wanted to change the name to Juame Serra, that's OK with me. I'm just guessing, but I'll bet they had priority in the use of the name, or the "CRISTAL" people would have shut them down.

It is a nice Brut Cava, good for a day at the beach or a nice dinner party, and it won't bankrupt you at all.

When you are done drinking the contents, you can make a little chair from the cap.

Or a whole lot of little chairs, if it is one of those kind of parties.

Some modern sparkling wines are going to a beer-style cap. There is nothing wrong with that, and it illustrates what sparkling wine really is - grape beer, in a manner of speaking.

At $6.99 a bottle, there is no reason that sparkling wine should be a New Year's and Anniversary kind of deal. Keep a few cold bottles in your fridge - and use them regularly.

Life is too short to not enjoy the Champagne! Or sparkling wine, as the case may be.

Saturday, December 30, 2017

This morning, the squirrels are in the bird feeder. Mark says, "go out there and chase them away!" So I put on a pair of shoes, and still in my pajamas (it is cold!) I go outside. As I go by the front door, Mark says, "grab a cane!" which I did, not knowing why. Was I going to hit the squirrel with it?

Anyway, I run out on the lawn, waving the cane and shouting at the squirrel, and my pajama bottoms fall down, as I had failed to tie them, coming from the bathroom. Fortunately, I was wearing underwear. I hear the front door slam and latch behind me.

I realize, in an instant, what is going on here. Mark is trying to have me committed to an insane asylum. He will call the Police and say I am in my bathrobe with my pants around my ankles, outside waving a cane and screaming at the squirrels. They will lead me away in a strait-jacket and take me to the funny farm, where life is beautiful all the time.

Well, that didn't quite happen. But we had a good laugh over it. And I moved the bird feeder so the little buggers couldn't jump onto it from a neighboring branch.

But it got me to thinking. We live on old people's island, and we get to see, firsthand, how the body and mind start to fall apart over time. Every so often, you read an article in the paper about how some researcher has found a chemical or some gene or something that causes aging. Aging is an interesting process - apparently your body just shuts off after so many years, and then starts a long, downhill decline toward death - and there is little you can do about it.

When I was a kid, I remember getting a cut on my finger. My Mom put a band-aid on it, and the next day, I took it off and the cut was gone - like a miracle! At age 57, if I get a cut, it can take days, weeks, or even longer to heal. The body just seems to have forgotten its own DNA and how to repair itself. And cuts when they do heal, leave scars, instead of the beautiful smooth skin I had as a youngster. I remember also, at that age, my Dad admonishing me to leave the band-aid on. At his age, he realized that simple cuts could get infected and take forever to heal. In his childhood, before antibiotics, a simple cut could kill you if it got infected. We lived in different worlds.

But there are other things that cause you to die, other than your DNA being programmed to do so. And it is programmed for a reason. While this death thing may not work to your personal advantage, it insures the survival of the species, by keeping the bulk of the population young and agile. A society that becomes old and feeble, dies.

But in addition to these species survival instinct, your body falls apart due to simple wear-and-tear. If you smoked or worked in a dusty environment, your lungs will burn out - if you don't get cancer first. Your joints and muscles will weaken, no matter how much you work out at the gym (or perhaps because you do). Your liver and kidneys and other organs will become damaged from disease or from what you eat and drink. Your heart will clog up like an old kitchen sink. Blood vessels may burst and kill you suddenly. All sort of nasty things can and will happen to you. We see it every day.

The brain itself, however, can also wear out. Brain cells don't regenerate, and if you drink heavily, you kill off brain cells by the millions, over time. Various diseases and some drugs can also affect your brain function. Over time, you lose cognition and start to forget things. In a way, this can be a blessing, as your brain dies before the body does. Others live to be very, very old, and their bodies become decrepit, pain-wracked machines, barely supporting the life of the still-alert brain, who feels every discomfort and indignity. Mark's grandmother lived this way in the last decade of her life, rarely leaving bed for nearly ten years. I am not sure that is a good way to go.

A friend of mine tells me that "All you ever talk about is money and death!" which upsets her, as she is in denial of both. They spend money willy-nilly and assume there will be more down the road when they need it. And I hope that is the case for them, too. They also assume they will live forever, and that death is something that happens to other people or something that is so far off, there is no need to think about it.

But I think that understanding a finite life is essential to living it. When you invest money, you realize that it is not forever, but rather you are investing to become independently wealthy, because there will be a time very soon in your life, when you can no longer earn money or just choose not to, and you want to be in a position where you have enough cash to support yourself during those last few decades of life. Dying sucks, yes. Being broke and dying sucks even more.

You see, life is about the experience, and you want to have a good experience, not a shitty one.

And I think understanding - and talking about - the finite nature of life is important, as well as talking about and understanding money. Because you only have so long in this world to figure this shit out!

A recent article in Marketwatch seems to indicate that 2018 will be a banner year for the stock market. That is, if you only read the first part of the article. The first part of the article talks about investor sentiment, and uses surveys of investors to show that people are still bullish on the market, and that young people in particular, think that stocks are a good investment right now.

Oh, boy.

The second part of the article is more interesting, as it canvasses professionals in the field. And their enthusiasm for stocks and the market is, well, a little more tempered:

Beyond those historical trends, investors are torn over the prospects for 2018 and beyond, though most analysts are expecting tepid returns. Equity strategists surveyed by MarketWatch expect the S&P to end next year at 2,819, which represents upside of about 5% from current levels. Meanwhile, in contrast to the bullishness expressed by the AAII poll, a survey from the Boston Consulting Group pointed to growing caution.

“Overall, 68% of respondents think the market is overvalued — by an ­average of 15 percentage points,” read BCG’s analysis of its survey. It noted that the percentage of bearish respondents was “more than twice the 29% of investors in last year’s survey who thought the market was overvalued.”

Only 16% said it was undervalued. Furthermore, investors on average are expecting total shareholder returns (TSR) of 5.5% over the coming three years, “the lowest percentage we have recorded since we began asking about TSR expectations in 2010, and close to half the long-term average TSR of 10% that companies have achieved over the past 90 years.”

More than half the investors in BCG’s survey — 53% — say the next economic recession will occur over the next two years; only 18% say it is more than three years out.

Well, as I have noted time and time again, trying to time the market is nearly impossible to do. But then again, you live through a number of these cycles and you start to see patterns emerge. During the meltdown of 2008-2009, we read tons of articles about how things were coming apart. I read dozens of articles that said that GM was facing bankruptcy, but decided not to sell my GM stock. I rode it "all the way down" to zero, which in retrospect, was kind of foolish - particularly after I read an article which described the company's massive debt problems. Hey, GM will never go bankrupt, right? Wrong.

I did see the signs of trouble in the Real Estate market and sold out in 2005-2007. We did OK, although one property we sold kind of late and we missed the top of the market. But considering how many people we knew personally that went bankrupt because of their "buy and flip" mentality, we consider ourselves very luck.

And for the record: None of these friends were poor people who bought houses through the Community Reinvestment Act - they were all middle- to upper-class people who thought they could get richer through buying and selling real estate. So let's put that "It was all Bill Clinton's fault due to the CRA" bullshit fake news urban legend to rest once and for all, OK?

The reality is, these sudden rises in the prices of gold, tech stocks, real estate - or whatever - followed by sudden declines, were bubbles. And bubbles occur when people over-bid the prices of things based on exuberance and emotion, and eventually reality kicks in and people realize that these things were not worth what they thought they were.

Which is why I find it very interesting than young investors are excited about stocks, while the older investment professionals have a more rational view. One group has lived through bubbles in the past, the other was still wetting its pants when the market collapsed in the spring of 2009.

The narrative that is being sold is that companies will start making all sorts of profits, now that the new tax law is in effect. They will repatriate money from overseas and invest it in the US in new factories and job hiring. The problem with this narrative is multifold. First, what do you invest in? You bring this money back to the USA and spend it on what?

Already, we are seeing an orgy or mergers and acquisitions, as companies, rife with cash, spending top dollar to acquire other companies. They are basically wasting this windfall by spending too much to buy out a competitor.

Second, in a tight job market, who are you going to hire? I ran into this with my own practice back in the late 1990's. The job market was very tight and it was very hard to hire anyone - even a secretary. I finally realized that it would be a lot easier to be one of these sought-after employees than to be a beleaguered employer, so I went off to work for an odious law firm that was doing "tech" IPOs and wanted an Patent Attorney on staff - and was willing to throw money at me. It didn't last long - and the tech bubble (if you can call pets.com "tech") burst and the firm changed direction and got into real estate or something.

So hiring costs will go up. They will have to hire people who are the dregs at the bottom of the barrel - folks who won't get up off their couch unless you overpay and underwork them. Your margins will shrink - and if you read the above article, you can see that profit margins are already in decline.

But let's assume that all of this can be fixed, and you "invest" this windfall in a new factory or by merging or whatever. Now you are on the road to profitability! You will sell your products and services and people will line up to buy them?

What people? The problem for the American consumer today is that wages are stagnant (even if employment is up) and their debt-load is at all-time highs. How are they going to buy all this junk if they don't have any money to spend and are hopelessly in debt?

Plus, I think there will be a lot of consumer fatigue in the future. Many are worried that the telcos and cable companies will try to charge premium prices for faster internet service, now that the "net neutrality" has been eliminated. But I have to ask myself, "who would pay for this?" - certainly not me. I think I would chose instead to consume less content rather than pay more.

And this is the flaw I see in most business plans these days. Many are predicated on the consumer being a chump and willing to pay more and more and more without complaint. "We'll give away the printer, and then screw them by forcing them to buy $50 printer cartridges that print only five pages before they dry out!" A nice plan, but what ended up happening is that the demise of paper was accelerated that much faster. When it came right down to it, folks realized that looking at something on a huge desktop display, laptop, phone, or pad, was just as good and a lot cheaper - in fact, free. You screw your customers and people find alternatives.

The point is, there are a lot of people in this country who has basically given up - folks in rural areas who are on Social Security disability and stealing their neighbor's shit so they can buy opiods. I am not sure that the rising tide caused by the tax cut will lift their boat much.

And then there is just history. Bull markets are always followed by Bears. How much of a bear, we don't know, but the more a bubble over-inflates, the further it has to fall. So the sooner the retraction is, the better off we all are. Sadly, this seems to be a pattern as of late - boom-and-bust cycles that are shorter and shorter. Some have noted that this type of "economy" tends to favor the very wealthy, as they can time their trades better than others (having better access to information) while the small investor blindly invests, either ignoring his investments (which is not a bad thing, necessarily) in his 401(k), or latching onto "the next big thing!" (which is horrific) and losing it all.

So what do we do? If you pull out of the market today, you might miss out on opportunities in 2018. If you keep your money in, it may drop in value if the market crashes - or at least retreats. Or maybe the market will just subside a bit, and there won't be any huge losses or gains. We can't predict the future.

I left most of my money in the market the last time around (other than cashing out on real estate) and after about a year, we recovered 90% or more of what was lost in February of 2009. So not panicking is probably the best strategy. If you decide to "sell out" after the market drops, you are merely locking in your losses.

My personal strategy is to diversify, and this time around, I have a lot more in cash than the last time, and part of this is by design. Since I am older and retired, I am spending my money, so I need to have some in cash, anyway. I did get a small inheritance from my Mother (less than 10% of my net worth, as it turns out) and I have left that in a money-market account. I simply didn't see anything worth investing in at this time. Real Estate? No. Stocks? No. Gold? Heck no. Bitcoin? Hell No. I'm not jeopardizing a good thing for a long-shot at a better thing.

But since I am closer to the end of my life than the beginning, it is better to be more in cash and bonds and "safe" investments than in stocks and real estate. Younger people can recover from setbacks - they have time on their side. Older people have little time, and a setback at an older age can be permanent.

I think we can hope for a soft landing in 2018. If the market continues to accelerate in 2018, it will be a harder landing in 2019 or 2020.

But that's just guessing. No one will really know until, well, about a year from now.

Friday, December 29, 2017

Gypsies exist in nearly every culture - people who will take rather than give.

Today we don't use the term "gypsy" to describe an ethnic group - it is now politically correct to call such folks Roma or Romani to distinguish the ethnic group from the criminal one. But the term "gypsy" has entered the lexicon as meaning any person or group of persons who live in the margins of society and make their living through chicanery or theft. And the term "gypped" has evolved from that to mean, well, what happens when you engage in a financial transaction with gypsies.

You buy a caravan from a pikey and you'll get gypped.

Now, thievery and chicanery have been around as long as man has walked on two feet. Eons ago, some clever cave man figured out that hunting mastodons and growing crops was time-consuming, and merely murdering your neighbors and taking their food was a lot easier. But of course, that is kind of messy, and when you murder the hunters and gatherers, you only can only eat for so long as they stored food for - then you have to go murder someone else.

And eventually, the other cavemen get wise, form an army, elect a chief, and hunt you down. I guess in a way, we should be thankful for those early sociopaths - they inadvertently created civilization and government, as primitive man gathered together in early city-states and kingdoms, for protection against highwaymen and robbers.

Theft and theft by deception are far better ways to make a living. You just steal a little here and there and then move on. People are pissed, but not enough to leave their crops and fields and chase you down. And thus, the gypsies were born. Well, I suppose that's how it evolved, anyway.

Today, there are gypsies in all cultures all over the world. A reader from Southeast Asia writes that his family finally evicted relatives from a house they owned, after nearly a decade. These nee'r-do-well cousins claimed poverty and asked for money constantly - while never paying rent. Once evicted, the family found bank statements left behind, indicating that these gypsies actually had substantial sums of money in the bank. They had been had. Falling for the "feeling sorry" gambit, they tried to help out a "less fortunate" relative, who merely managed to transfer a good portion of the family fortune to their fortune.

Such folks exist everywhere - playing upon the sympathy of strangers, or even friends and relatives. They live by an immoral code that whatever profits them is moral, and all that matters is that other people give them things, or they take them. We even have such a band here on retirement island, believe it or not.

There is a family of gypsies - a loosely organized group of husbands, wives, second husbands, ex-husbands, girlfriends, boyfriends, cousins, children, uncles, etc., that has hung out here for well over a decade. They perform acts of minor theft, perhaps a little drug dealing, and they go to work for local employers and steal as much as they can before they are fired. They get caught, on occasion, go to jail, get out, and go right back at it.

They are not the brightest bulbs in the chandelier, but like the squirrels breaking into my bird feeder, very persistent. We had a series of break-ins on the island, and if you plotted them on a map and put a dot in the center of all the incidents, it would center on their house. One fellow was eventually caught and went to jail, but that didn't stop the rest of the family from continuing their criminal enterprises. They get jobs at local restaurants, work long enough to collect unemployment, and then get fired, which isn't hard when you show up late or not at all, don't do any work, and steal food and money and liquor until they are caught.

And a lot of people live this way, believe it or not. And the smarter ones figure out smarter cons to use to get at people's money. I described before how a Russian mafia ring was using stolen credit card data to place fake ads for non-existent dogs on the Internet. They then used Craiglist to advertise for "secret shoppers" to "test" Western Union for them, by picking up wire transfers from the duped buyers of the non-existent dogs, and then forward them to Russia. The complexity of the thing staggered my imagination - but in retrospect, it was not very hard to set up - just a few clicks of a mouse and a few hours online with some photos of dogs "scraped" from the Internet, and you're in business.

That is one hallmark of a real gyppo strategy - to make a con or a theft so complicated that it is hard to follow and hard to prosecute. For example, in Rome, there are organized groups of purse snatchers and pickpockets. One will take your purse from the back of a chair or bump into you and grab your wallet. They quickly hand this off to a cohort, so even if you realize the theft and call the Police, they can play innocent and say, "go ahead and search me, I have no such wallet!"

At the Trevi Fountain in Rome, tourists gather to see the sights, and suddenly you find yourself surrounded by a swarm of gypsy children, all shouting and laughing. So colorful and fun - and designed to distract you, while someone else puts their hand in your handbag - it happened to my sister-in-law, but fortunately she was with a local who knew the score and grabbed the gypsy's arm halfway through the "pull".

My parents were targeted by a similar group, who followed their rental car and waited for my parents to stop at a roadside historical attraction. They smashed the rear window and grabbed all their luggage and were away in a heartbeat. Later, while waiting for new passports, they went to the Trevi Fountain, and the colorful gypsy children showed up. My mother, being wise to these scams by this point, started kicking them in the shins.

Speaking of break-ins of cars, we had a rash of these on our island, and next door on rich people's island, at remote beaches where people park their cars. Smash a window, grab a purse or backpack, and then move on. They caught one fellow with 15 purses in the trunk of his car. He had just been released from jail and as the arresting officer noted, "He must like prison food" and he went right back.

And the Police really aren't very sympathetic when your shit gets stolen. They've had to deal with more serious stuff, so your stolen iPad isn't a priority prosecution for them. Odds are, they will never catch the guy, and a better approach is - sadly - to not leave stuff in your car when parked in isolated areas. Of course, why we don't have a security camera at these remote beach locations is a good question. Oh, right, our privacy concerns. I sometimes wonder if that is just a canard put up by the association of gypsies, tramps, and thieves in an effort to preserve their livelihood.

These sorts of folks are one reason why many States have a "three strikes and your're out" law - designed to put chronic criminals being bars forever. Every so often, the media runs a story where they lament that "poor Joe" went to jail for 20 years for "stealing a loaf of bread" or something. But if you look into the story, "poor Joe" is a habitual criminal, sent to jail several times for various charges, and also has an arrest record a mile long. Oh, and he stole that loaf of bread at gunpoint.

These are folks who don't play by the rules and never will. Our justice system is a joke to them, and going to jail is just part and parcel of their lives. And for every one crime they are prosecuted and convicted for, there are maybe 10 or 20 they are arrested for. And for every one they are arrested for, maybe anther 10 or 20 or 100 they are never caught at. These are the folks who steal all your shit. These people are the reason the rest of us can't have nice things. They are anti-civilization at its most basic form. I shed no tears when one is locked up under three strikes and neither should you. And shame on the media for making "heroes" out of such folks, just to generate a few clicks and sell a few SUV advertisements. It is disgusting, and one reason why this "fake news" thing has taken a new meaning with the far-right.

But of course, the smarter gypsies in the modern era do their chicanery online. It is a lot easier to steal over the internet - and a lot less risky - than to do so in person. People in America have a lot of guns, and breaking into someone's house could result in your death. However, if you are in an internet cafe in Nigeria, mass-uploading craigslist advertisements for non-existent campers, the risk of bodily injury is nil, the cost is de minimus, and the profits are huge.

And just like with the smash-and-grab theft of your purse from the front seat of your car, the Police are going to have little sympathy for you when you call them to report the crime. They can't go after someone in Lagos, Nigeria, and moreover, it is your own damn fault for thinking you could buy a $20,000 camper for the oddball price of $2314 on Craigslist.

So what can you do to put a stop to this sort of thing? First, you have to be more astute in your own life. Stop falling for cons and scams and get-rich-quick schemes. Don't go to timeshare seminars or casinos. Stop believing in the tooth-fairy, the gold-fairy, or the bitcoin-fairy (or the IPO-fairy, while you're at it). Be skeptical of these things and be able to spot them from 1000 yards off.

Second, stop buying crap. No one can steal your fancy stereo you put into your $1500 1999 Honda if you don't own one. Parking your car in a sketchy, isolated spot and then leaving thousands of dollars of computers, cell phones, and iPads on the front seat (as happened recently on rich people's island) is just asking for trouble. Own less stuff, and have less stuff to worry about. Yea, I know, that seems like you are letting the gypsies win when you do this, but there really is no other choice. Buying alarm systems, putting bars on your windows, and getting a vicious dog to protect your television is just idiotic thinking, if you think about it. Move to a better neighborhood and own less stuff and own more money.

Third, stop feeling sorry for criminals and perhaps stop being one yourself. So many people in the United States have this visceral hatred of the Police, mostly because they get speeding and other traffic tickets all the time. As I noted before, the problem for the Police is that they really can only police the law-abiding citizens, who have fixed addresses, fixed assets, and good jobs. The secretary coming home from the office Christmas party blowing a 0.09 might end up losing her job and paying $25,000 in attorney's fees to stay out of jail. The gypsy who lives in a trailer park, has 3 DUIs on his record, and no valid driver's license, goes to jail again and again, until he finally kills someone.

The media loves a good "wrongfully convicted" story or a story that wants to make us feel sorry for criminals. For example, there is one in the paper today, entitled "Teenager with mental health issues jailed nearly 4 years without trial" which sounds awful. The article is accompanied by a photo of his 6th grade graduation - such a cute kid! But when you read the article, you realize he was a young adult at age 16 - old enough to drive a car, old enough to kill. And he stabbed his Father's girlfriend in the gut and severed her colon. Luckily, she survived (but no doubt will have medical issues for the rest of her life).

And the travesty of justice? Well, he gets out of jail in 2018, a mere six years from the commission of the crime. But of course, this is based on a BBC story, and Brits love to run down America (particularly The Guardian) to distract themselves from their poor life choices with regard to Brexit. We are supposed to feel sorry for this "kid" who attempted to murder someone, because... what again?

Reject these sort of articles and arguments. Sadly, it seems that we in America (perhaps the world) tend to romanticize crime and criminals. Most television shows are about crime, and while in the past, the Police usually always "got their man", today it seems that more and more we are identifying with the criminals as happy-go-lucky folks who just like to steal your life savings and break your kneecaps.

It is like our romanticization and fascination with pirates, who back in the day, would murder the entire male population of a coastal village, burn it to the ground, and then rape and murder all the women. Some fun, eh? Today it is a ride at Disneyland. Maybe in 100 years, they'll have a similar themed Nazi ride? I highly doubt it - but really if you think about it, it is the same idea.

And I guess that is the point - our society, human society, often sides with the criminals. So you have to look out for your own interests and stop "feeling sorry" for people or being gullible and taken in. As it turns out, the folks who seem "vulnerable" are often quite good at taking care of themselves, and often do odious things to get by, as they are easier and more pleasurable things to do.

We feel sorry for the "shoeless" homeless man, until we realize he is just taking off his shoes to gain sympathy, in the same way beggars in Mexico and India rent children and smear them with dirt to have a "prop" to beg with. And if you point this out to people, they get on their high horse, and claim to be morally superior to you, because they care. Moreover, they want you to think that the guy stealing your shit is the real victim here, and you, who work hard and pay your debts, is some sort of criminal by dint of earning a living.
But eventually, everyone gets fatigued by crime and criminals. Today's "social justice warrior" in college is just one getting-his-bike-stolen away from becoming tomorrow's "law and order" young Republican. Eventually, you realize that the folks taking from society are not romantic (an interesting word, considering it has the same roots as roma) but merely thieves.

And you should have no sympathy for criminals and thieves, of all sorts.

Thursday, December 28, 2017

This guy is like a Leo Buscaglia who kicks you in the teeth. I like him, sort of.

What is a man-child and why is this a hot topic these days? There are a number of reasons, but the phenomenon of the "man-child" or the "bounceback kid" or the stoner living in Mom's basement has been around for decades now. In fact I was one at one time, sort of, but I managed to pull myself out of that nosedive and move on with life, sort of.

When I was 13 years old, my 23-year-old sister decided that it would be a good idea to "mellow me out" by giving me pot. And it was pretty amazing. Suddenly, I felt really good and good about myself. It was a lot of fun, and I went back to the pipe again and again trying to relive that initial feeling. It never really came back. Instead, my grades dropped, and I lost interest in almost everything in life, other than getting high and drinking beer.

I dropped out of college. I hung around with other stoners. We drank beer, smoked pot, and bitched about how shitty life was, what a raw deal we got, how others were cheating and working the system, and how the good old USA was evil, vile, and corrupt and unfair. And we'd do another bong hit to forget about it, before we went off to do menial jobs for low wages. And nothing ever changed in our lives and never would. Few of us had steady girlfriends for very long - women don't want to marry a stoner and loser - it is not a very great future for them. And many of my stoner friends used women - badly. Misogyny and pot go hand in hand, as I have noted before.

What changed? Well, I did. And it is never too late to change, but as the video above points out, the longer you wait, the harder it is. And I was fortunate in that at age 18, I was a salary employee of General Motors - it was like going to a very sobering boot camp. So unlike my po-thead friends, I had a good job, a college education I was working on (slowly!) and something of a future ahead of me. Once I stopped smoking pot, I finished my degree in less than a year and moved away - and started law school.

So you can change your life - it is possible. 30 years later, I am retired and doing well. But if had not smoked pot and maybe made different choices? Once of my classmates at GMI is now President of GM. I am not saying that would have happened to me (I am not as smart as she is) but I could have done far better and perhaps done greater things. But I'm not complaining - I'm doing far better than my stoner friends - I had a career, and am comfortable and happy most of all. I had none of those things when I was a "Man-Child" pot smoker. In fact, I was pretty miserable back then.

My experience was not unique, and over the years, the man-child phenomenon has gotten worse. They started calling them "bounceback kids" in the 1980's and 1990's, because you'd try to launch them in a career by sending them to college, and they'd bounce back, live at home, and work at menial jobs that made just enough to keep them in pot and beer. And it seems their number is on the rise - an army of video-game playing basement dwellers who have no future to look forward to, other than perhaps to attend a Nazi rally or a Bernie Sanders rally (the latter being marginally better). They have grand political ideas - much as we did, back in the day - but are utterly clueless with regard to their own lives.

Why didn't we see this in earlier generations? Well, I think in part because society wouldn't let this happen. In the early 1900's, you had to work or die - there was no social security, welfare, or safety net. Work or die. You read some of the Horatio Alger stories of the late 1800's and what is interesting is not the improbable success of the young hero, but the wretched conditions the other young boys have to live in - being boot blacks, delivering papers, or working in factories. Life sucked then, and there wasn't time to smoke pot and live in Mom's basement. Mom was probably dead, anyway.

The next generations had to deal with the great depression and World War II. Parents sent off young men to CCC camps to work and earn some small amount of money to send home to support Ma and Pa. And then World War II - 18-year-old men being given charge of a million-dollar airplane, or a new tank, or a heavy gun or truck. Or just handed a rifle and told to march into withering enemy fire. There wasn't time to be a slacker or a stoner then, although the GI's on leave drank up a lot of beer. After the war, they all got jobs and settled down - well, maybe except a few who started biker gangs.

The 1950's saw the birth of the beatniks who challenged conformity and perhaps were the first examples of the man-child - the Maynard G. Krebs of the era. But the 1950's were a conformist era, and few challenged the status quo. The economy was expanding, and you were expected to become a "company man" and toe the line. All that started to change in the 1960's.

By the 1960's - much of which actually took place in the 1970's - the hippie movement was in full swing. Dropping out, turning on, and tuning in was the new mantra. My oldest brother decided to denounce "materialism" and went off to live in a commune, spending the next decade of his life living in an unheated barn and following the commands of the bearded "guru" who ran the place. A decade later, he wakes up and wonders where the fuck his life went, and goes back to college to get an advanced degree, and a job. Today, he has a job with (hopefully) a pension. Like I said, it is possible to change your life, but it gets harder the longer you delay.

Since those days, the bounceback kid and the man-child are now firmly part of the landscape. And one reason why is we can afford this today, as we are a wealthy country, whether you choose to believe it or not. Parents can afford to keep children as pets until their 30's. Eventually, something has to give, and the kids wake up and set out on their own. When we lived in Alexandria (when we were in our 30's), we had a gaggle of friends who liked to come over and swim in the pool and drink beer. We called them the "20-somethings" as they were all in their mid-20s, working slacker jobs, and getting high or drunk a lot. Some were living with parents.

Well, that was over 20 years ago. Since then, they have all married off, some having children. They have careers, houses, 401(k) plans. They are no longer children anymore. But it is sort of a new norm in America to spend your 20's just hanging and goofing and really not starting life until your 30's. And many don't start having children until their 40's - which leads to complications, medically.

Thus, I am not sure the man-child phenomenon is going to go away anytime soon. He (and increasingly, She) is now firmly part of the landscape. The idea that your 20's is a time to slack off has taken hold in our culture.

The good news is, like I said, it is possible to change your life - although harder as you go along. A young woman I know was sent to jail for stealing credit cards, and was hanging out with a drug crowd in flophouse motels. She had all the potential of a crack-whore, and I sort of lost touch with her, as it was too painful to watch. Well, today, she's a successful businesswoman and property owner. She changed her life, but not until, well, about age 30. You see a pattern here.

And so on down the line - I know dozens of people who have gone through this route besides me. The problem is, of course, not everyone pulls out of the nosedive in time. Some do indeed go on to become crack whores, or go insane from smoking pot and dropping acid all the time (it is not good for your brain to be a chronic, ask Jason Mewes).

Not only that, drug use and hanging out with marginal people can be dangerous, particularly today. My young friend who was hanging out in flophouses could have ended up raped, killed, trafficked or whatnot. And drug use today is far more dangerous than the beer and pot we had back then. In addition to methamphetamine, we have opioids now - which are killing so many people that the average life expectancy in the USA has dropped a year.

In other words, this has stopped being funny for a long time now. Even if you escape injury, death, or great bodily harm, there are other issues to consider. Going off to college and dropping out was a bad idea for me - but I recovered, because I didn't have crippling student loan debts. Today, we see bounce-back kids living with Mom and Dad because they can't pay off their student loans. This shit has gotten way too serious that smoking pot will make you forget about it.

The millennial generation or whatever you want to call them did get a raw deal in that regard. But, I think that is all the more reason not to fall into the man-child trap, because it is so much harder today to get out of it. I realize this is not good news, but it is a reality.

And you can accept reality and live in it, or rail against it an accomplish nothing. Those really are the only two choices.

Bubbles occur when the perceived value of some commodity far exceeds its real value. In order to do this, some folks have to keep the perceived value in the public eye, and tamp down any mention of real value. Social media is the perfect platform for bubbles.

In the world of investment scams there are what I call bubble deniers. These folks, and the arguments they make, fall into a number of categories, and basically their goal is to groom and program people to buy into investment scams by de-legitimizing any opposing viewpoints. Their tactics and types are many, and include one or more of the following techniques to shout down opposition to pyramid schemes, bubble Investments, Ponzi schemes and the like.

One way to tell if something is a bubble or a scam, is if you see these sort of techniques being played out either online or in-person.

The bubble denier proper, denies that bubbles even exist. I ran into this recently when we were discussing the tulip bubble. I received an email from a bubble denier claiming the bubbles never existed in fact the Tulip bubble in Holland 1600s never even happened. That's good news to all the people who lost their life savings on tulip bulbs - maybe their descendants will get their money back.

The so-called logic behind this argument was that inflated prices for commodities or stocks or whatever or merely "market evaluations" of those items. This is sort of a non sequitur. It doesn't address the fact that the price of these items skyrocket in a short period of time and then crash just as quickly. If these are truly realistic market valuations of these commodities or stocks, why do they rise and fall so quickly? And the answer is of course that they are not realistic evaluations but inflated or hyped evaluations - they are skewed perceptions of value, and it is all-too-easy to skew people's perceptions through persuasion.

And that is how con artists make money out of these scams, whether it is typing gold or hyping penny stocks or whatever. The idea is to change the perception of the value of an item and get people to pay a lot of money for it, before you pull out the rug from under them.

Another technique is the credentialist argument. They will quote or cite some so-called expert in the field, saying that the value of the commodity or stock or whatever has nowhere to go but up. This was common during the gold bubble (which I can think we can now say has burst) where "experts" predicted that gold would hit $5000 an ounce, "soon" - without any reasons being given. Of course, the credentials of these people is usually somewhat sketchy. Often, the only real credential they have is proclaiming themselves to be expert on the field whether it is gold or Bitcoin or some heavily hyped penny stock.

The victims or potential victims of these scams are then told, "Look, Mr. Credential says this is a great deal, and the naysayers, what credentials do they have? They don't know what the hell they're talking about!"

And people will believe these sort of arguments, and even repeat them among each other. That's the beauty of all of these scams and hypes is that not only will people believe what you or your audience shills or trolls say, but the victims will actually repeat these things themselves - what the Soviets used to call "useful idiots." It is like going to a timeshare seminar. After sitting in the audience for three hours, hearing what a great deal timeshares are, you may find that you yourself fall for this rhetoric and actually repeat it to others. Why not invest in your vacation? Why not, indeed.

(Shills bear mentioning, and the term is from the auction world. A shill is a "plant" in the audience who places fake bids on auction items, in order to gin up the price. If an item is getting no bids, the shill will bid on it to make it look like people want the item. Or if a buyer is serious about buying it, the shill will counter-bid, trying to get the buyer to raise his bid (a tricky bit of business, as if the shill over-bids, the real buyer may back out). Sometimes, a real shill isn't needed - the auctioneer merely points in a vague direction and calls out a phony bid he claims to have seen. Since he is usually pointing at the chandelier, these are called "chandelier bids". As you can see, the auction world is another example of how perceived value trumps real value.)

______________________________

The good news is, whenever you see these sort of arguments in play, you can be sure you have stumbled upon a scam, con, or bubble. Legitimate investments don't need to skew your perceptions to get you to invest.

______________________________

The third subset of this group or type of argument is the phony mathematician. This is the guy who cranks numbers to show that whatever the investment is, it is a good deal. Of course, the numbers are either fake or skewed or the math is wholly wrong. But few people challenge it, as few people really have a visceral understanding of math. For example, in one gold group I recently visited, a fellow opines that gold is still a good investment for anyone who bought it in the past, except perhaps for the three or four years when it peaked in 1981. Other than that, he argues, it has "held its value" with regard to inflation and therefore would have been a good investment for anyone. As he put it, "Any investment anything that's gone up in value has to be good investment right?"

Of course, there a lot of errors in this mathematics. To begin with, besides the bubble of 1981 there have been other bubbles such as in 1974 as well as the recent bubble in 2011 where the price peaked at $1,800 an ounce before falling back to $1,200 today. Not only that, by selectively choosing start and end dates, they're showing it to be a "good investment" when in fact it really wasn't. Even if you bought gold after the bubble burst in 1981, you would have seen absolutely no appreciation in it for almost 15 years. Factoring in inflation, that's losing money. Thus, it was really a bad investment for more than merely a time period of a few years during the bubbles but also during the long stretches where it just simply fail to appreciate in value.

But his argument carried the day, of course, with others "piling on" (some shills, some useful idiots) echoing the sentiment and not bringing up any sticky details that might derail the group-think.

The reality is, the only really good time to buy gold is right before it shoots up in value in a bubble, and that's really hard to predict. Even harder to predict as when the bubble will burst and then sell out in time. In fact, bubbles are really shitty investments to begin with, and there really is no way to properly time that the buying and selling of bubble items. The best thing you can do is just stay away from these things. And specious mathematics doesn't change this analysis.

Yet another tactic used to preserve the group-think is the personal attack which may be combined with baiting - along with a combination of the previous techniques. I noted before in another posting how a fellow in another blog tried to debunk some sort of scam. Like clockwork, he was baited by people perpetrating the scam - posting messages on his blog which were incendiary. When the blogger responded, the troll played the classic game, "Well, I can see my comments have clearly upset you! Why don't you calm down and we can talk about this rationally?" In other words, the guy's a weirdo, so whatever he says can be discounted. And that's how the bubble promoters work, on their sites.

If someone questions the legitimacy of whatever it is they are doing, and the above tactics don't work to convince the plebes to keep the faith, you just attack the attacker. "Don't listen to him - he's nuts! Everyone who knows anything knows that gold/bitcoin/pennystocks/real estate/timeshares/whatever is the greatest thing since sliced bread! He's probably just miffed he missed out on such a good deal!

Arguing with these folks or trying to point out the flaws in their logic is fruitless - regardless of whether it is a paid troll selling the commodity in question, or just the useful idiot at work who bought into it, and is now proselytizing on his own. The best thing you can do for yourself, is not try to "save others" but just walk away.

The good news is, whenever you see these sort of arguments in play, you can be sure you have stumbled upon a scam, con, or bubble. Legitimate investments don't need to skew your perceptions to get you to invest.

* * *

UPDATE: With regard to Bitcoin, South Korea said today that they will close cryptocurrency exchanges unless they can be made accountable (i.e., - provide the government with the names of who is buying and selling the currency and how much). Like clockwork, a cryptocurrency "expert" (self-appointed, natch!) tried to spin this as South Korea being "jealous" of "so many people making so much money in cryptocurrencies!" Uh, right, that could happen.

The reality is, of course, that their neighbor, North Korea, is skirting sanctions, engaging in arms and drug trading, spreading ransomware, and doing all sorts of nefarious and illegal things using Bitcoin as a medium of exchange. Shutting down Bitcoin is their way of striking back at a rogue state.

We are moving to a cashless society where physical money is disappearing quickly. This is good news for governments and tax authorities, as it is harder to conceal money electronically. Even Swiss bank accounts and offshore Cayman Islands banks have been pierced by governments. If they are taking down the Swiss, do you think they will let Bitcoin get a pass? I think not. South Korea and China are already cracking down - the rest of the world will follow suit.

And then what do you have? A "currency" that costs more to use, takes longer to use, and is just as traceable as a credit card transaction. Hmmmm.... that value does that have?

UPDATE: A reader sends me a link to a blog entry where the blogger engages in the old "the tulip bubble never happened, thus Bitcoin is not a bubble" bit. But that is not the blog entry I was thinking about - but rather one from several years back at the height of the gold bubble, when someone made the same argument - the tulip bubble never happened, thus gold is not a bubble. Since gold crashed from a high of nearly $1800 to $1200 and has stayed there, I think we can call that a bubble now.

Another person argued we should "go back to the gold standard, when the economy was stable!" He uses credentialism ("respected Wall Street Publisher") and the ersatz mathematics to make his "point". But as I noted in my blog entry, there are maybe - just maybe - one or two bubbles that burst when we were on the gold standard.

No bubbles? You don't have to go back to the 1600's to find examples of bubbles. We had one just a few years ago in gold, a few years before that in houses, and before that in tech stocks, and so on. And in each case, the techniques recited in this blog entry were used to shout down the naysayers.
This alone, is proof of a bubble - when people say, "It's not a bubble!"